Civil Fraud:City of Los Angeles And The CRA/LA Play In The Process of Uncovering Waste, Fraud, And Abuse

Civil Fraud:City of Los Angeles And The CRA/LA Play In The Process of Uncovering Waste, Fraud, And Abuse

U.S. Intervenes in ‘Whistleblower’ Lawsuit against City of Los Angeles that Alleges City Received Millions of Dollars in Federal Grants and Knowingly Failed to Provide Housing Accessible to the Disabled

LOS ANGELES – The United States has intervened in a lawsuit against the City of Los Angeles and the CRA/LA (formerly the Community Redevelopment Agency of the City of Los Angeles) alleging that they falsely certified compliance with federal accessibility laws in connection with housing grants from the U.S. Department of Housing and Urban Development (HUD), the Department of Justice announced today.

The lawsuit alleges that the city and the CRA/LA violated accessibility laws – including Section 504 of the Rehabilitation Act and the Fair Housing Act – and the duty to affirmatively further fair housing, which are meant to ensure that people with disabilities have fair and equal access to public housing.

The lawsuit alleges that the City of Los Angeles applied for and received millions of dollars in federal housing funds, a portion of which it provided to the CRA/LA, to develop affordable housing that was accessible to people with disabilities. As recipients of HUD funds, the city and the CRA/LA were required to comply with the accessibility laws.

Among other things, the accessibility laws require that 5 percent of all units in certain federally-assisted multifamily housing units be accessible to people with mobility impairments, and an additional 2 percent be accessible to people with visual and auditory impairments. The laws also require that the City of Los Angeles and the CRA/LA maintain a publicly available list of accessible units and their accessibility features. The laws further require that the city and the CRA/LA have a monitoring program in place to ensure that people with disabilities are not excluded from participation in, denied the benefits of, or otherwise subjected to discrimination in federally-assisted housing programs and activities solely on the basis of a disability.

As a precondition for receiving HUD funds, each year the city certified compliance with Section 504 and the Fair Housing Act, and certified that it satisfied its duty to affirmatively further fair housing. The lawsuit alleges that the city and CRA/LA failed to operate their housing programs in compliance with these federal civil rights laws, which resulted in public housing that was built without the minimum number of accessible units. The lawsuit also alleges that the city and the CRA/LA neither monitored sub-recipients of HUD funds to ensure that they complied with federal accessibility laws nor maintained a publicly-available list of accessible units.

“This case alleges that the City of Los Angeles repeatedly violated the law by falsely certifying that millions of federal dollars were being used to build housing that included units accessible to people with disabilities,” said Acting United States Attorney Sandra R. Brown. “While people with disabilities struggled to find accessible housing, the city and its agents denied them equal access to housing while falsely certifying the availability of such housing to keep the dollars flowing. The conduct alleged in this case is very troubling because of the impact on people who did not have access to housing that met their needs.”

“Recipients of federal housing funds must honor their commitments to accommodate people with disabilities,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “Denying people with disabilities equal access to public housing deprives one of the most disadvantaged groups in society of fair housing opportunities.”

The lawsuit, United States ex rel. Ling, et al. v. City of Los Angeles, et al., CV11-974 (PG), was filed in United States District Court in Los Angeles by Mei Ling, a resident of Los Angeles who uses a wheelchair, and the Fair Housing Council of San Fernando Valley, a nonprofit civil rights advocacy group. After a lengthy investigation, the United States elected to intervene in the lawsuit, which was unsealed on May 31 in an order signed by United States District Judge Philip S. Gutierrez. The government learned that the case was unsealed earlier this week.

The lawsuit was filed under the qui tam – or whistleblower – provisions of the False Claims Act, which permit private parties to sue on behalf of the United States when they believe that a party has submitted false claims for government funds, and to receive a share of any recovery. The False Claims Act permits the government to intervene in such a lawsuit, as it has done in this case. The United States has until July 31 to file its complaint in intervention.

“This case demonstrates the important role whistleblowers play in the process of uncovering waste, fraud, and abuse,” said HUD Inspector General David A. Montoya. “It further displays our commitment to fully pursue allegations that are brought to our attention.”

This matter was investigated by Assistant United States Attorney Lisa A. Palombo of the Civil Fraud Section of the United States Attorney’s Office, the Commercial Litigation Branch of the Justice Department’s Civil Division, and the HUD Office of Inspector General.

The claims asserted against the City of Los Angeles and the CRA/LA are allegations only. There has not yet been a determination of liability.

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